Bank of England Holds Steady Amid Economic Uncertainties

The Bank of England has maintained its main interest rate at 4.5% amid sluggish economic growth and uncertainty arising from US tariff policies. With inflation above target, the rate-setting panel remains cautious. Economic challenges persist as the new Labour government faces criticism over growth measures.

The Bank of England decided to keep its key UK interest rate unchanged at 4.5% despite the economy's slow growth and added uncertainty due to the tariff policies implemented by the Trump administration in the US. This decision aligns with the US Federal Reserve's recent move to keep interest rates steady.

According to meeting minutes, eight of the nine Monetary Policy Committee members voted to maintain the current policy, with one member advocating for a quarter-point cut. The committee has previously reduced the rate from a 16-year high of 5.25% on three occasions since August, most recently in February, after inflation levels declined from historic highs.

Inflation, currently at 3%, surpasses the bank's 2% target and could rise further, potentially reaching 4%, due to factors like increasing minimum wages and payroll taxes. Bank of England Governor Andrew Bailey highlighted the prevailing economic uncertainty, noting expectations for a gradual decline in interest rates. Another rate cut may occur in May, subject to the bank's latest economic forecasts.

(With inputs from agencies.)